Recently, in Polaris Industries, Inc., v. Arctic Cat, Inc., No. 2016-1807, 2016-2280 (Fed. Cir. February 9, 2018), the Court of Appeals for the Federal Circuit (?Ç£CAFC?Ç¥) overturned a Patent Trial and Appeal Board (?Ç£Board?Ç¥) decision that all claims of a patent directed to a side-by-side all-terrain vehicle (ATV) were unpatentable as obvious in a first inter partes review (IPR), while affirming the Board?ÇÖs decision that the claims of the same patent were not unpatentable in view of a different combination of references in a second IPR. Specifically, the CFAC found that the Board failed to conduct a proper teaching away analysis and failed to weigh Polaris?ÇÖs argument of commercial success when determining certain claims were obvious.
This appeal stems from two IPR petitions filed by Arctic Cat challenging the patentability of U.S. Patent No. 8,596,405 (?Ç£the ?Çÿ405 patent?Ç¥) after Arctic Cat was sued by Polaris for infringing claims of that patent.?á The?á?Çÿ405 patent is directed to a four-wheeled drive ATV that has side-by-side seating for a driver and passenger.?á The?á?Çÿ405 patent expresses the desire for an ATV with side-by-side seating to maintain a low center of gravity. Thus, many of the claims are directed to the placement of components such as a protective panel, a fuel tank, a battery, and a front driveshaft on the ATV in order to achieve a low center of gravity.?á Arctic Cat argued that the claims of the?á?Çÿ405 patent were obvious in view of a combination of U.S. Patent Nos. 7,658,258 (?Ç£Denney?Ç¥) and 5,327,989 (?Ç£Furuhashi?Ç¥) in the first IPR (?Ç£the 1427 IPR?Ç¥), and obvious in view of U.S. Patent No. 3,709,314 (?Ç£Hickey?Ç¥) and at least one of Denney and Furuhashi?áin the second IPR (?Ç£the 1428 IPR?Ç¥).
In the 1427 IPR, the Board found that Denney?átaught every limitation of claim 1 with the exception of limitations relating to four-wheel drive, and a limitation directed to a transmission coupled to and extending rearwardly from the engine.?á The Board relied on the teachings of Furuhashi?áto remedy the deficiencies in Denney. The Board ultimately determined that all thirty eight claims had been proven unpatentable as obvious in view of the combination of Denney?áand ?áFuruhashi, a decision which Polaris appealed.?á In the 1428 IPR, the Board found that Arctic Cat had not shown that the claims of the ?á?Çÿ405 patent were obvious over combinations including Hickey, a decision which Arctic Cat cross-appealed.
On appeal, Polaris argued that the 1427 IPR decision was incorrect for impermissible hindsight.?á Specifically, Polaris contended that the Board relied on hindsight to combine Denney?áand Furuhashi because Denney?áteaches away from a front drive shaft and fuel tank under the seating area.?á Polaris submitted that the Board?ÇÖs ?Ç£subjective preferences?Ç¥ analysis of teaching away had no basis in any court precedent.?á Also, Polaris argued that the Board erred in rejecting the undisputed evidence of commercial success of Polaris?ÇÖs RZR vehicles, which Polaris argued were covered claims 34 and 36-38 of the ?Çÿ405 patent.
Looking at the issue of impermissible hindsight, the CAFC upheld the Board?ÇÖs decision that dependent claim 16, which recites that the front driveshaft extends under the protective panel, was obvious.?á Polaris argued there would have been no motivation for one of skill in the art to include the front driveshaft taught by Furuhashi underneath the ATV of Denney?ábecause this location in Denney?áwould expose the driveshaft to damage and decrease the ATV?ÇÖs clearance.?á However, the CAFC found no error in the Board?ÇÖs decision siding with Arctic Cat?ÇÖs reasoning that there was adequate space in the structure of Denney for a front drive shaft with minimal modification alongside, or in place of, a support truss which would not raise the center of gravity.
Claims 17-19 of the patent-at-issue are directed to a fuel tank positioned below one of the seats, a battery positioned below the other seat, and a front driveshaft extending laterally between the battery and the fuel tank.?á During the 1427 IPR, the Board concluded that these claims were obvious in view of the combination of Denney?áand Furuhashi.?á Polaris presented undisputed evidence that these components would raise the center of gravity of the vehicle in Denney, and argued that Denney‘s disclosed desire for a low center of gravity teaches away from including anything under the seating area such as the fuel tank of Furuhashi.?á The Board rejected these arguments based on its reasoning against similar arguments Polaris had made for claim 1. ?Ç£The Board reasoned that, although Denney?á?Çÿdiscloses a desire for a low center of gravity,?ÇÖ this desire is simply one of several ?Çÿsubjective preferences?ÇÖ that is ?Çÿa tool of limited value in evaluating obviousness?ÇÖ due to its ?Çÿinfinite variab[ility]?ÇÖ that could be overcome by other known preferences, such as adding four-wheel drive to a two-wheel drive vehicle.?Ç¥ Polaris Industries, Inc., v. Arctic Cat, Inc., No. 2016-1807, 2016-2280, 9 (Fed. Cir. February 9, 2018) (citing Arctic Cat, Inc. v. Polaris Indus., Inc., No. IPR2014-01427, 2016 WL 498434, at *6 (P.T.A.B. Feb. 4, 2016)).
The CAFC found that ?Ç£the Board (1) failed to consider Polaris?ÇÖs uncontested evidence that skilled artisans would not have been motivated to place a fuel tank under Denney?ÇÖs seats; and (2) applied a legal analysis that not only finds no support in our caselaw, but also runs contrary to the concept of teaching away.?Ç¥ Id. at 18. ?á?áSpecifically, the ?Ç£subjective preferences?Ç¥ analysis was invented by the Board and used to dismiss Polaris?ÇÖs teaching away argument.?á The CAFC reiterated that, in determining whether Denney teaches away from claims 17-19, the Board should have determined ?Ç£whether ?Çÿa person of ordinary skill, upon reading [Denney] would be discouraged from following the path set out in [Denney], or would be led in a direction divergent form the path that was taken by the applicant.?ÇÖ?Ç¥ Id.?áat 19 (citing ?áIn re Fulton, 391 F.3d 1195, 1201 (Fed. Cir. 2004).?á The CAFC found the ?Ç£subjective preferences?Ç¥ analysis used by the Board faulty in that (1) it invited distortion caused by hindsight bias, especially in relatively simple mechanical cases such as this, (2) it ?Ç£focused on what a skilled artisan would have been able to do, rather than what a skilled artisan would have been motivated to do at the time of the invention?Ç¥ (Id.?áat 20), and (3) it encourages the fact-finder to discard evidence both to teaching away and whether one of skill in the art would have been motivated to combine.
Thus, the CAFC vacated the Board?ÇÖs obviousness determination with respect to claims 17-19, and directed the Board on remand to ?Ç£determine whether Denney?ámerely expresses a general preference for maintaining very low seats or whether Denney‘s teachings ?Çÿcriticize, discredit, or otherwise discourage?ÇÖ significantly raising the occupancy area of Denney?ÇÖs ATV to add a fuel tank under one of the seats.?Ç¥ Id.?áat 21 (citing DePuy Spine, Inc. v. Medtronic Sofamor Danek, Inc., 567 F.3d 1314, 1327 (Fed. Cir. 2009)).?á Furthermore, the CAFC stated that ?Ç£[e]ven if the Board determines that Denney?ádoes not teach away because it merely expresses a general preference, the statements in Denney are still relevant to determine whether a skilled artisan would be motivated to combine Denney and Furuhashi.?Ç¥ Id.?áat 23.
Polaris then argued that the CAFC should vacate the Board?ÇÖs obviousness determination for independent claims 1, 25, and 34 because it used the subjective preferences analysis in rejecting Polaris?ÇÖs teaching away argument.?á However, the evidence indicated that a skilled artisan could have modified the vehicle of Denney?áwith the teachings of Furuhashi?ásuch that Denney?áhad four-wheel drive without raising the center of gravity of the vehicle and Denney.?á Therefore, there was not enough support from Polaris that the Board?ÇÖs subjective preference analysis impacted its obviousness determination.
Finally, turning to the Board?ÇÖs analysis of claims 34 and 36-38, Polaris argued that the Board failed to consider its evidence of commercial success when determining whether those claims would have been obvious.?á The Board dismissed, at conclusory statements, Polaris?ÇÖs expert?ÇÖs testimony that eight different RZR vehicles produced by Polaris had generated over $1.5 billion in sales and embodied each element recited in claims 34 and 36-38 of the?á?Çÿ405 patent.?á Also, Arctic Cat presented no contrary evidence to Polaris?ÇÖs claim of commercial success. Polaris submitted that because it presented evidence that the RZR vehicles covered the claims, Polaris was entitled to a presumption of commercial success. The CAFC stated that the Board?ÇÖs reasoning that Polaris?ÇÖs expert?ÇÖs testimony was conclusory statements was improper and stated ?Ç£[o]ur case law does not require a patentee and its expert to go further than Polaris did here, however, to demonstrate that its commercial products are the inventions disclosed in the challenged claims, where the proffered evidence is not rebutted and the technology is relatively simple.?Ç¥ Id.?áat 28.?á This is because there is a ?Ç£presum[ption] that such a nexus applies for objective indicia when the patentee shows that the asserted objective evidence is tied to a specific product and that product ?Çÿembodies the claimed features, and is coextensive with them.?ÇÖ?Ç¥ Id.?áat 26-27 (citing Brown & Williamson Tobacco Corp. v. Philip Morris Inc., 229 F.3d 1120, 1130 (Fed. Cir. 2000)). By showing that the RZR vehicles were covered by claims 34 and 36-38 and the claims did not disclose just a portion of the RZR vehicles, the CAFC found that Polaris has a presumption that any commercial success of these vehicles is due to the patented invention unless that presumption is adequately rebutted.
Thus, when making a commercial success argument, practitioners should attempt to obtain an expert?ÇÖs opinion that construes the claims as one of ordinary skill in the art would understand them, and states that the commercially successful product embodies and is coextensive with those claims.?á In addition, patent drafters may consider drafting a set of claims that covers the entire product, even if the invention is only a component of that product, as the CAFC appeared to give more deference to Polaris?ÇÖs commercial success argument based on the claims at issue covering the entire RZR vehicles.?á In addition, the CAFC also hinted that these types of claims would likely make it more difficult to rebut the presumption of the nexus between the claims and the commercial success of the product at hand.?á ?áFinally, with respect to teaching away, patent drafters may consider whether problem statements and other disclosures in the specification are expressed as general preferences rather than affirmative statements that criticize, discredit, or otherwise discourage particular embodiments that may turn out to have value.